Authors

Document Type

Article

Publication Date

1-2015

Abstract

Emails released beginning in the fall of 2014 demonstrate several improper private communications between high-level utility officials and decision-makers at the California Public Utility Commission (“CPUC”). The email chains show discussions ranging from a utility repeatedly lobbying on the outcome of an enforcement matter or aggressively pushing for a new judge assignment, to a commissioner soliciting donations to a political campaign or a banquet fund. Entities in the transportation industry have also alleged improper contacts with CPUC officials. In each instance, the CPUC decision-makers did not report the communications or insist that the utilities stop sending them. Rather, they actively participated in the exchanges and, if anything, encouraged them.

In the judicial and adjudicatory context, courts, legislatures and public agencies have long prohibited private communications with decision-makers to ensure a fair outcome and preserve the integrity of governmental action. These private communications are called ex parte contacts. Even though the CPUC uses a judicial-type of process to gather information for the record and allow for argument by interested parties, it broadly permits ex parte contacts in ratemaking proceedings, which are the majority of the CPUC’s contested cases. In addition, as many of the revealed emails indicate, some CPUC decision-makers have allowed for ex parte communications in circumstances in which all such contacts are strictly prohibited. Many decision-makers in the CPUC regularly engage in off-the-record communications with utilities and other stakeholders, creating a culture of conversations with parties occurring behind closed doors. The recent disclosures have caused many to seriously question the CPUC’s decisionmaking process.

To restore the integrity of the CPUC’s process, the agency and the legislature should change the applicable rules. An analysis of practices in other state and federal agencies reveals that federal regulators, other California agencies, and utility regulators in most other states make similar decisions without allowing for ex parte contacts. While the CPUC places no constraints on private communications related to legislative rulemaking proceedings, many ex parte rules examined in this analysis take a more nuanced approach and focus on whether a proceeding is contested, hearings are held, or substantive rights might be affected.